'Energetic' session moves Hawaii toward greener, more efficient future

ENERGY WAS a signature issue for the 2006 Legislature -- and it went beyond the now-vanquished gas cap that was the focus of media attention.

The welcome surprise was a remarkable spirit of bipartisan public interest that led to significant strides in attaining a more secure and sustainable energy future.

WHAT IS THE HAWAII ENERGY POLICY FORUM? The Hawaii Energy Policy Forum is based at the University of Hawaii at Manoa. The Forum is an experiment in inclusive, collaborative energy planning and policy making that brings together businesses, utilities, academia, government and environmental organizations, to use compromise and consensus to the design and forward a flexible, forward-looking energy strategy for Hawaii. For more information and a list of members and supporting organizations, visit www.hawaiienergypolicy.hawaii.edu

The Lingle administration and the legislative majorities proposed energy packages with more in common than not. The 43-member Hawaii Energy Policy Forum, a diverse organization of energy stakeholders, also came to the session with a 10-point energy plan and several key bills. While the bills disappeared during the session, their contents live on in the final product passed by the Legislature.

This session saw highly committed and public-spirited legislators and administration officials who worked tirelessly under intense pressure to come out with a comprehensive and forward-looking package of bills.

Overall, the final package, including proposals from the Senate and House majority packages and the Governor's Omnibus Bill, strengthens our efforts to reduce dependence on imported fossil fuel. The forum hopes and expects the bills will soon be signed into law by the governor.

Some might say the bills don't go far enough. Based on the forum's review and discussion, we see them all as welcome strides forward, and as heading Hawaii in the right direction. Briefly, the major measures include:

» Establish policies and regulations to encourage energy efficiency and renewable energy.

The biggest accomplishment of the session might be the least exciting. The session raised important questions about energy policy and how best to provide incentives and get rid of barriers for less costly and more secure energy for Hawaii. The Legislature gave the Hawaii Public Utilities Commission the authority to answer these questions and act on the answers.

A few have criticized the Legislature for "punting" important questions to the PUC. But considering that energy questions have complex intertwined policy, technical, legal and financial answers, that was the better part of wisdom.

The Legislature rightfully set the broad policy directives and authorized the PUC to conduct the needed technical analyses, fact-finding and policy and standards development and enforcement.

The full-time, year-round, three-member PUC is appointed by the governor and confirmed by the Senate. Although it definitely needs more staff and with better salaries, the PUC has a highly qualified and specialized staff devoted full time to supervising public service companies.

Unlike legislative hearings, PUC hearings are "quasi-judicial," meaning testimony is taken under oath with cross questioning by interested parties, including the consumer advocate -- an effective way to mill the truth from the claims.

The PUC is the best place for the developing thoughtful energy policy, without taking anything from the Legislature's authority to enable, suggest, encourage or mandate policy to be implemented.

We still look to the administration, including the consumer advocate, who questions and find the best practices for the consumers, and the Legislature to do what was done this session: pose serious policy questions and give the PUC authority to act on the answers.

And to ensure that the PUC (and the consumer advocate who represents the energy consumers' interests) could address these highly technical and complex issues, the necessary human and financial resources was acknowledged and supported.

» Expand renewable energy opportunities

The state's renewable energy technologies income tax credit to encourage private investment in wind and solar is now permanent and credit amounts have been raised so consumers receive more help for installing solar hot water heaters and photovoltaic systems.

To remove the cost barriers to installing solar water heaters, a pilot solar water heating "pay as you save" program will be established so residential customers can purchase a solar hot water system with no upfront payments and pay off the cost over time on their electricity bill.

» Renewables incentives

The state's Renewable Portfolio Standard law was revised with clearer definitions and a provision that at least half of the RPS requirement (20 percent by the year 2020) must come from renewable energy sources like wind, solar, geothermal, hydro and biomass, with the balance coming from energy efficiency measures. The PUC can require more than half, as well as mete out penalties if utilities do not meet the RPS requirement.

» Steps toward a hydrogen economy

A renewable hydrogen program was established with an investment capital special fund of $10 million to support the first year's activities.

» Energy efficiency "green" standards

New planning and budget goals are established for state agencies that incorporate "green" building practices, including renewable energy resources, increased conservation, waste reduction and pollution prevention. Goals are set for government purchase of environmentally friendly products such as fuel-efficient vehicles and alternative fuels.

Also, one bill requires county agencies that issue construction or development permits to set give priority processing to projects that meet energy efficiency and environmental design standards.

» Revitalized oversight

The PUC already is looking at the best ways to manage and encourage energy efficiency in the state and the new laws give the PUC the authority to establish an independent "energy efficiency utility" with the power to collect money from customers and spend it to encourage energy efficiency and renewables -- a task now managed by the utilities.

The PUC also is authorized to examine the "fuel price adjustment" clause, which is the cost of fuel for electricity that the utilities charge the consumers, to determine whether changing that system will encourage the utilities to do more to pursue renewables or will subject consumers to even higher costs.

» Our preferred energy vision

Signing these bills into law is only the next step in a process that will take real commitment and action. For example, the bills provide support and standards to build and buy "green," but it will take the state and counties to actually build and buy "green" buildings and products that use less energy, even if they are somewhat more expensive in the short-run.

If Hawaii seriously intends to reduce its dependence on imported fossil fuel, it also will require dealing with transportation as well as electricity generation. The forum had proposed a revenue-neutral "fee-bate" -- a so-called "hummers for hybrids" bill -- to increase licensing costs for gas guzzlers to offset reducing those costs for fuel efficient vehicles, including hybrids and other high gas mileage vehicles.

We hope to explore these and other options in the coming year.

Ten states, including California and New York, have sued the Bush administration to force it to toughen mileage regulations for sports utility vehicles and other trucks -- an indicator that we cannot count on federal government support for transportation efficiency.

With its small share of the automobile market, Hawaii can do little to pressure manufacturers, but the state can make it easier for consumers to do the right thing and buy fuel- efficient vehicles.

In its wisdom, the Legislature also appropriated $200,000 to the Hawaii Energy Policy Forum to continue our work, which means the forum and our diverse members will be active throughout the year to make sure the progress made on paper in this session turns into reality.

While the Legislature delivered a comprehensive and forward-looking package of bills, which should not go unnoticed, we still face the real challenge to:

» carry out the Legislature's directives;

» keep our focus on energy so these first steps become long hikes; and

» fill in gaps where the Legislature did not act.

The forum plans to be back before the start of the next legislative session with a new set of proposals to keep Hawaii on its journey to a better energy future.

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